The new war on the rich desktop client is being won easily! by Adobe Air. You would expect Microsoft to win it swiftly with all their expertise and real estate on desktops but somehow it is being played by them so cumbersomely. Microsoft first tried to chase the flash in-browser capabilities with their own version of Silverlight while at the same time Adobe was already crawling into the desktop. While still being stuck at solving the rich in-browser puzzle Adobe is becoming a very cool first mover to the rich desktop market.
Few weeks ago Microsoft launched something called Out of Browser experience which looks like an unplanned feature aiming to strike back. SSB or Single Site Browsers are nothing new (see Fluid, Bubbles and Prism as examples) and a shortcut to a website is nothing even close to really installed client.
Maybe it is the cross platform portability aspect that holds things back, an issue within Microsoft that is not solved strategically yet (and should have been a long time ago after noticing that Windows is not the only operating system in the world).
Actually their platform conflict raises an interesting strategic problem: on one hand their milking cow which is MS-Windows has to be advocated ferociously, on the other hand they look into other areas for growth and these areas potentially address users that are not feeding their cow but their rivals. And now to the big question: should I admit the existence of other users and support them and by that indirectly affect badly my cows condition in comparison to others. Or should I ignore them in hopes that others' cows will die without our support or at least not get stronger. I think it is a question of balance. First, how old is your cow? Every cow will die at the end and knowing when it is over the top is a good thing. Second, Is your cow really threatened by others and how the threat affects it in terms of making her life shorter. Third, has the business changed to chickes and eggs and you didn't notice it?
Sorry for the animals metaphor but I got into it:)